COLOMBO - Prime Minister Yousuf Raza Gilani and his Indian counterpart Manmohan Singh are meeting here today on the sidelines of the SAARC Summit to defuse the current tension between the two countries emanating from latest border skirmishes at Line of Control. All heads of governments and states are meeting on the sidelines of the summit, but no such meeting has been scheduled so far between the heads of Pakistan and Afghanistan. Afghan President Hamid Karzai is also in Colombo to take part in the summit meeting. Meanwhile, Yousuf Raza Gilani on Friday said Pakistan and India were undergoing a process of dialogue to resolve all their contentious disputes including that of Jammu and Kashmir. Speaking here at a dinner hosted by Pakistani High Commissioner in honour of his delegation, Gilani said he wanted to see South Asia as a region of sustainable peace and prosperity which was also the vision of his late leader Benazir Bhutto. The SAARC region, the Prime Minister added, at present was facing a number of challenges which included energy, food and environment issues. He stressed the need for intra-regional trade between the SAARC region to compete in the globalised world and meet its challenges. The trade figure of the SAARC countries, he said, was below two percent of the total trade in the region. The Prime Minister also mentioned the challenges that Pakistan was facing due to terrorism and extremism particularly in the tribal areas and said the government has adopted a three-pronged strategy to address these issues. He said his government did not wish to go for the military approach to resolve these problems and instead its priority is to engage into political dialogue and then developing these areas through economic measures. Referring to Pakistan-Sri Lanka relations, he termed them exemplary and said these were rooted deep in time through Gandhara civilisation. Gilani said the Free Trade Agreement with Sri Lanka in 2002 has ushered in a new chapter of economic and trade relations between the two countries. The government, he added, firmly believes in good governance and in this connection various measures have already been taken. The democratically elected government which he said was committed to serving the masses, has rendered many sacrifices for the restoration of true democracy in the country. He said in this struggle for democracy, Benazir Bhutto laid down her life. The dinner was attended by a large number of Sri Lankan civil and military officials, leaders of business and industry, Pakistanis in Colombo besides the members of Prime Minister's entourage. Meanwhile, eight member countries of South Asian Association for Regional Cooperation (SAARC) including Pakistan are meeting today in Colombo to sign agreements regarding regional cooperation in the fields of energy, food security, bilateral trade and terrorism. The two-day 15th SAARC Summit would focus on harnessing indigenous sources of energy and enhance cooperation in solar, wind, bio, and hydro energy and to strengthen regional energy-related institutions. In this connection, SAARC countries would consider concluding a Regional Framework Agreement for Energy Cooperation to create an enabling environment for regional energy cooperation necessitates. Pakistan has proposed to strengthen SAARC Energy Centre and the implementation of proposed SAARC-GTZ project titled Support on renewable energies and energy efficiency to the SAARC Energy Centre. The member countries have also identified food security as an important area of regional cooperation, and are most likely to agree on establishing SAARC Food Bank in the near future. To materialise this objective, the countries would try to develop a framework to share and learn from best practices in the region and beyond. The SAARC countries would also explore the possibility of initiating joint venture projects in food and agriculture. Some of these projects could be financed by SAARC Development Fund. Adoption of additional trade facilitation measures to supplement SAFTA would also be discussed during today's summit. The SAARC countries would also renew their pledge to the implementation of SAARC conventions on separation of terrorism, narcotics and trafficking in women and children. They are also likely to sign SAARC convention on mutual assistance in criminal matters. Some implementation issues on SAARC Exemption Scheme would be placed before the forthcoming meeting of the SAARC immigration authority in Islamabad. Agencies add: India said on Friday that a spate of bombings in Indian cities and at its embassy in Kabul had adversely affected its four-year-old peace initiative with Pakistan. "If you ask me to describe the state of the dialogue, it is in a place where it hasn't been in the last four years," Foreign Secretary Shiv Shankar Menon told reporters. "We face a situation where things have happened in the recent past which were unfortunate and which quite frankly have affected the future of the dialogue." Meanwhile, Pakistan's Foreign Minister Shah Mehmood Qureshi said trade and cultural similarities are the best ways to improve relations between Pakistan and India. "If the Berlin Wall can fall so can these troubles that we have that are keeping us apart," Qureshi said in Colombo. "I think trade will build new bridges, which are so important between us. I say we have been looking at divergences, look at the convergences we have, look at the language, culture, dress," he said at a seminar with Indian counterpart Pranab Mukherjee. Qureshi said the region had to resolve its conflicts if the SAARC was to help lift millions of people out of poverty and push up living standards.